Over the past year, many Xenon Pharmaceuticals Inc. (NASDAQ:XENE) insiders sold a significant stake in the company which may have piqued investors' interest. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, if numerous insiders are selling, shareholders should investigate more.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Xenon Pharmaceuticals Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the Independent Director, Steven Gannon, sold US$602k worth of shares at a price of US$46.45 per share. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. It's of some comfort that this sale was conducted at a price well above the current share price, which is US$40.83. So it may not shed much light on insider confidence at current levels.

All up, insiders sold more shares in Xenon Pharmaceuticals than they bought, over the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

If you are like me, then you will not want to miss this free list of small cap stocks that are not only being bought by insiders but also have attractive valuations.

Does Xenon Pharmaceuticals Boast High Insider Ownership?

Many investors like to check how much of a company is owned by insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Our data suggests Xenon Pharmaceuticals insiders own 0.1% of the company, worth about US$4.3m. We consider this fairly low insider ownership.

So What Do The Xenon Pharmaceuticals Insider Transactions Indicate?

It doesn't really mean much that no insider has traded Xenon Pharmaceuticals shares in the last quarter. Our analysis of Xenon Pharmaceuticals insider transactions leaves us unenthusiastic. And usually insiders own more stock in the company, according to our data. While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. Be aware that Xenon Pharmaceuticals is showing 3 warning signs in our investment analysis, and 1 of those doesn't sit too well with us...

Of course Xenon Pharmaceuticals may not be the best stock to buy. So you may wish to see this free collection of high quality companies.

For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions of direct interests only, but not derivative transactions or indirect interests.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.